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Self Directing that IRA or 401K

Guidant Financial Group

by Brad Zimmerman

Tired of investing in the typical investment vehicles? Looking for more excitement in where your money could be going and the returns you could get? Look no further than your very own retirement accounts to spark a new enthusiasm in investing and a new way to look at places to put that nest egg.

The self directed IRA is the hip new retirement investment strategy that can put your money nearly anywhere you want it go, from start-up�s to real estate to many other non-traditional investments. Similar is the self directed 401K which strives to give its account holders the freedom to explore the investment universe.

Obviously the risk/reward scenario with alternative investments is much greater; making self directed retirement accounts a hot topic among investment professionals. For those considering taking the plunge, consider both the help of professionals and extensive research to understand the depth of self directed accounts. For the record nearly any investment is in play except life insurance, collectibles or anything that would directly benefit you or a close family member, according to Business Week.

One way to hedge the risk of alternative investments, especially in the real estate world is to withdraw the chunk you wish to invest from your traditional IRA and create a separate account for your self-directed account. Also remember to be smart with you money and keep such investments between 10 and 20 percent of your total retirement nest egg, according to Business Week.

Little perks to a self directed IRA including avoiding nagging transaction costs and a higher level of diversification among your investments. You also won�t be in a crowd to move over to the self-directed aisle, with roughly 2 percent of the $5.7 billion IRA market in alternative investments according to Yahoo Finance.

Anyone looking to open their own self-directed retirement accounts must hire a custodian company to help handle payments and tax issues, as with more complex investing comes a whole new set of potential complications, according to Yahoo Finance.

While it is no secret that the self-directed account is not for the faint of heart, an increasingly up and down stock market and ice cold credit market are forcing investors whose retirement accounts have already been hit hard to consider other options. Many traditional financial advisors may advise against a self-directed account simply due to the risk and participation on the side of the account holder, however a well educated investor ready to take the plunge in the world of alternative investments could stand to profit greatly.

Provided by www.guidantfinancial.com